Question: Question 1 ( 2 0 marks ) 1 . 1 The return from the market last year was 1 0 % per annum and the

Question 1(20 marks)
1.1 The return from the market last year was 10% per annum and the risk-free rate was 6% per annum. A hedge fund manayer with a beta of 1.1 has an alpha of 5%. Given the performance of the market last year, what annual return did the hedge fund manager earn?
(2)
Question 1 ( 2 0 marks ) 1 . 1 The return from

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Cost of capital Exercise 1 The company XYZ expected to distribute $1.44 and the growth rate of dividend is 3%. The pretax cost of debt is 10%, and its marginal tax rate is 40%. Assume that the firm's...

Q:

Chapter 11 1 What are the portfolio Weights for a portfolio that has 185 shares of stock A that sells for $64 per share, 115 shares of stock B that sells for $49.00 per share? 24 You own a portfolio...

Q:

> Moving to another question will save this response Quellion 10 of 20 > >> Question 10 1 points Save Answer ABC Corporation's stock had an expected return of 11.75% last year, when the risk free...

Q:

1. Suppose a firm is expected to earn $5 per share next year. The firm has a beta of 1.2, the expected return on the market is 8%, and the risk free rate is 2%. (a) What is the value of the firm if...

Q:

Subject Investment [20] QUESTION FIVE 5.1 Using the following information for Poimex's portfolios, answer question 5.1.1 and 5.12 that follow: Primex invested R2 000 000 in a portfolio with the...

Q:

QUESTION 4 Vocal INC at the end of the years to have 1 of 55, the firm has cost of of 12 urrently markets Answer the following questi What is the firm's current growth rate? A 41.6666 B. 40.0000 C....

Q:

DEF Corporation considers whether it would invest project A or project B, and the cash flow for each project is given in the above table. Assuming firms weighted average cost of capital is equal to...

Q:

The expected return on the market is 14.52 percent, the risk free rate is 4.65 percent, and the tax rate is 35 percent. Fairfax Paint has 1, 400,000 common shares outstanding that are priced at 30...

Q:

Excel Problem 3 Show All Excel Work (21 points) The Pack Company has employed you to determine its weighted average cost of capital. Next year's sales revenue is projected to be $2,500,500. Variable...

Q:

You want to invest in a project that cost 500,000. It is a 3 year MACRS project. The capital is raised by issuing new debt and equity. The firm issues 25,000 shares priced at 10 each, the market...

Q:

You recently went short one Eurodollar futures contract at a price of 95.55. Not long after you've entered into a short position, the Federal Reserve (USA) announced a decrease in the cash rate from...

Q:

What are the risks and benefits of expanding the Disney brand in new ways?

Q:

Exercise 13-39 Fraud Concepts Consider each of the following situations. Is there a potential problem? Which part of the fraud triangle is involved, if any? A. Susan is an accounts payable clerk. She...

Q:

What are some food related health care issues that inner cities are more likely to see than more affluent areas? Why are certain areas most likely to experience inadequate healthy food options than...